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Leader Environmental Technologies clinches $24.5 mil contract to treat municipal sludge in China

Felicia Tan
Felicia Tan • 2 min read
Leader Environmental Technologies clinches $24.5 mil contract to treat municipal sludge in China
The investment in the project will be funded using the proceeds from the company’s rights issue and bank loans.
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Leader Environmental Technologies has secured a public-private partnership project worth RMB114.75 million ($24.5 million) in China’s Bazhou city in Hebei province.

The project involves the design, construction and operation of a sludge treatment plant that treats some 120 tonnes a day.

The project also involves the recycling of the treated sludge into bricks for a concessionary period of 30 years. The minimum tariff payment for the project is guaranteed and has been included in the approved annual finance budget of the province.

For the project, the company will form a subsidiary with other shareholders, Anweijinda and Tianjin Municipal Engineering Design & Research Institute to invest in the project.

The three companies will hold stakes of 99.98%, 0.01% and 0.01% respectively within the subsidiary.

The investment in the project will be funded using the proceeds from the company’s rights issue and bank loans.

See also: Kingsmen renews F1 contracts for $53.2 million

According to the filing posted by the company, it will design and construct the treatment facility using its proprietary technologies such as the integrated continuous thermal hydrolysis and pyrolysis.

The subsidiary will be operating the plant to earn a stable and recurring income for the next 30 years.

“With China pushing the goals to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060, sludge treatment and reuse will be the trend in addressing carbon reduction work which has become the priority of local government,” says Li Li, Leader Environmental Technologies’ CEO.

See also: Soilbuild Construction subsidiaries awarded contracts worth $135.1 mil

“China’s sludge treatment market has exceeded RMB50 billion since 2017 and is expected to increase at a rate of 10% per annum. We see great market potential for sludge treatment and will continue our efforts to ride on this sludge treatment segment of our business,” Li adds.

The construction phase of the project is scheduled to be completed within one year and will contribute positively to the revenue of the company for the financial year ending Dec 31, 2022.

Shares in Leader Environmental Technologies closed 0.3 cent higher or 4.48% up at 7 cents on Jan 6.

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